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Statement on
Auditing Standards
Issued by the Auditing Standards Board
American Institute of
Certified Public Accountants
Reports on the Application of
Accounting Principles
1. Accounting principles evolve in response to changing economic
conditions and to new transactions and financial products. 1 Agreement
frequently does not exist about how accounting principles should be
applied to those transactions and products. Management, accountants,
and intermediaries often consult with professionals, including other
accountants, on the application of accounting principles to those transactions
and products or to increase their knowledge of specific financial
reporting issues. 2 Such consultations are often useful because they may
provide information and insights not otherwise available.
Applicability
2. This statement provides guidance that an accountant in public
practice (" reporting accountant"), either in connection with a proposal
to obtain a new client or otherwise, should apply3 —
1Accounting principles include generally accepted accounting principles and other
comprehensive bases of accounting. See SAS No. 14, Special Reports, paragraph 4
( AICPA, Professional Standards, vol. 1, AU sec. 621) for a description of other comprehensive
bases of accounting.
2" Intermediaries" refers to those parties who may advise one or more principals to a
transaction, and may include, but are not limited to, attorneys and investment, merchant,
and commercial bankers.
3See Rule 91.11 ( AICPA, Professional Standards, vol. 2, ET sec. 91.11) for a definition
of " practice of public accounting."
Copyright © 1986 by the
American Institute of Certified Public Accountants, Inc.
1211 Avenue of the Americas, New York, N. Y. 10036- 8775
1234567890 AudS 89876
AICPA
July 1986 50
